End the Online Sales Tax 'Break'
NLC calls on the federal government to enact legislation to level the playing-field between e-commerce and brick-and-mortar retailers by giving state and local governments the authority to collect sales taxes on remote sales.
While the internet creates exciting new marketplaces, it has also put traditional retail outlets at an unfair disadvantage because of outdated and inequitable tax and regulatory environments. The Supreme Court's decision in Quill Corp. v. North Dakota, 504 U.S. 298 (1992), left state and local governments unable to adequately enforce their existing sales tax laws on sales by out-of-state catalog and online sellers. The Court, however, explicitly stated that Congress had the constitutional authority to enact legislation overruling its decision. Thus, if Congress acts upon its authority to regulate interstate commerce, state and local governments could collect taxes owed on Internet and mail order sales amounting to $23 billion.
